Crypto Terms Every Beginner Should Know in 2023

In the fall of 2021, the crypto market provided players with a real gift in the form of a Bitcoin rally to new all-time highs. We are ready to bet that against this background, even people far from the crypto started to touch on the topic of cryptocurrencies. 

Thus, we decided to prepare an educational article on crypto terminology, which will help you demonstrate a deep understanding of the innovative market.

Who are whales and devs? Why do people encourage me to HODL to the moon and buy a dip? Check out our crypto vocabulary to find out!

Cryptocurrencies 

 

• • Altcoins — the name of all cryptocurrencies except bitcoin, stands for ‘alternative coins.’

• • Crypto, coin — a digital asset running on its own blockchain. For example, Bitcoin (BTC), Ether (ETH), or Solana (SOL) are native coins of their blockchain networks. 

• • Digital gold — the very first and largest cryptocurrency by market cap, Bitcoin (BTC).

• • Ether, digital silver — popular names for Ethereum (ETH), the second largest cryptocurrency in the Ethereum network by market cap.

• • Fiat — a fiat currency issued by a public financial body, such as a central bank.

• • Halving — The block reward for Bitcoin mining is reduced by 50% at each halving occasion. A halving occurs after 210,000 blocks have been mined since the previous one, which occurs roughly every 4 years. The Bitcoin network began with a 50 BTC block reward and is now at a level of 6.25 BTC per block after three halvings.

• • HODL, HODLer — the term originated in 2013 when a user of the popular crypto forum bitcointalk.org wrote a post in which he urged everyone to hold their bitcoins without selling them. However, the forum member made a typo and wrote ‘hodl’ instead of ‘hold.’ Today, HODL refers to a strategy in which investors hold their cryptocurrencies and do not sell them even when the value is skyrocketing. Also, this expression is often interpreted as ‘Hold On for Dear Life.’

• • ICO — a term that stands for initial coin offering or initial currency offering and is a type of funding using cryptocurrencies. 

• • Satoshis, sats — is the name of the smallest indivisible part of bitcoin, which is equal to one hundred millionth of BTC — 1 satoshi is equal to 0.00000001 BTC.

• • Stablecoin — a digital currency that is pegged to a ‘stable’ reserve asset like the U.S. dollar or gold.

• • Staking — a process of locking cryptocurrencies to receive a reward instead.

• • Token — a digital asset running on top of an already existing blockchain network. For example, USDT by Tether or Link by Chainlink are tokens powered by the Ethereum blockchain.

Crypto Market Players

 

• • Bulls — in traditional markets, bulls are securities traders who seek to capitalize on the growth in the value of assets in the long term. Why bulls? The reason is that when this animal attacks, it lifts its prey up with its horns. Accordingly, a bull market is one that grows due to the activity of a large number of buyers.

• • Bears — are the opposite of bulls. They are confident that the value of an asset will go down, so they sell it, opening short positions. Why bear? Bears, unlike bulls, hit their victims with their paws down when attacking. Accordingly, a bear market is called one where sellers dominate.

• • Devs — a term that stands for developers.

• • Newbies — a term that denotes beginners, i.e., inexperienced traders in the crypto market.

• • Scammers — a term that stands for ‘scam’ and denotes fraudsters who try to steal your cryptocurrencies.

• • Whales — experienced traders who make large transactions that can significantly affect a cryptocurrency rate.

Blockchain 

 

• • ASIC — special equipment for cryptocurrency mining. The term stands for an application-specific integrated circuit.

• • Blockchain — a public ledger of information collected through a network that sits on top of the internet.

• • DeFi — a term that stands for Decentralized finance and uses emerging technology to remove third parties and centralized institutions from financial transactions

• • Farm — a set of mining equipment combined into one common system.

• • Fork — a situation where changes are made to the public code of the blockchain. A soft fork occurs when new changes do not require a client update, and the new network nodes are compatible with the previous version. A hard fork, on the other hand, occurs when there is a massive change that creates a new version of the blockchain network. It will no longer be compatible with the old version. A good example is the Bitcoin Cash cryptocurrency, which appeared due to a hard fork of the Bitcoin network.

• • Mempool — a place where transactions are stored awaiting confirmation on the network. So, for example, at the current network speed, the Bitcoin blockchain can process 4.85 transactions per second.

• • Mining — the process of mining cryptocurrencies that operate on the basis of blockchain networks with the Proof of Work (PoW) consensus algorithm. Mining involves the computing power of a computer or a special device, such as an ASIC.

• • Miner — the one who mines cryptocurrencies through mining or the device itself that mines new cryptocurrencies.

• • Node — any computer connected to the blockchain network through special software called a client. This is a kind of entry point through which users interact with the blockchain network. Nodes can be divided into several types: full, incomplete, or lightweight, masternodes, supernodes, mining nodes, and archive nodes.

• • Pending — waiting for transaction confirmation.

Crypto Trading

 

• • Bottom — the lowest point where the value of a cryptocurrency can go, after which the price rises. To break the bottom is to fall below the previously planned point.

• • Candle — a visual display of the amount of transactions made over a certain period of time, for example, per hour (hourly candle) or per day (daily candle). Candles show how the value of an asset has changed over this time.

• • Dump — manipulation, in which a trader artificially underestimates the value of an asset for a short period by selling more assets. Accordingly, dumping is to underestimate the price.

• • DYOR — a term that stands for ‘Do Your Own Research’ and is frequently used as a warning to other investors by cryptocurrency influencers, reminding that there is no better substitute for due diligence than conducting your own research.

• • FOMO — a lost-profit syndrome. The term comes from the phrase ‘Fear of Missing Out,’ which describes the condition in which a trader is afraid to miss a good opportunity to make a profit.

• • FUD — an acronym for ‘Fear, uncertainty and doubt.’ This is a manipulation in which negative information is spread about a cryptocurrency to sow doubts about the future prospects of this coin.

• • Pump — a flip side of a dump, in which traders artificially increase the value of an asset for a short period of time. The purpose of the pump is to attract new buyers to sell an asset at the most attractive price.

• • ROI — a term that stands for ‘Return on investment’ and is a monetary metric used to evaluate the effectiveness of asset investment. It serves as a gauge of how much more valuable your investment has become over time.

• • Sideways trend, flat — a smooth market movement in a specific time period without a significant move up or down.

• • Skyrocket — a sharp jump in the rate of cryptocurrency up.

• • To The Moon — a rapid increase in the asset’s value to maximum values.

• • Volatility — a statistical indicator indicating the change in the value of the price of an asset. High volatility indicates that the price of an asset is changing quickly and significantly.

We hope our list of basic crypto terms will come in handy! What other popular crypto terms do you know? Let us know in the comments below!